A new report by six multilateral development banks documents that of the $20 billion in financing these banks provided for climate mitigation, 30%, or $6 billion, was dedicated to renewable energy projects.
The six banks represent five continents and include the World Bank, The European Investment Bank (EIB), the Inter-American Development Bank (IDB), the Asian Development Bank (ADB), the African Development Bank (AfDB) and the European Bank for Reconstruction and Development (EBRD).
But while European institutions are over-represented among these banks, the majority of funding for renewable energy projects is going to projects outside of Europe. According to charts in the report, around US$1.5 billion, or 1/4 of the total renewable energy project finance has been dedicated to projects in Latin American and the Caribbean.
In Latin America IDB has been an important player, funding projects including the Aura Solar 1, the first large utility-scale solar project in Mexico and one of the first in the region. IDB notes that much of the financing it has made available has been through cooperation with concessional resources, including the Canadian Climate Fund for the Private Sector, and the Clean Technology Fund, which is overseen by the World Bank.
"Given the state of the industry, we could not do them without this support from the concessional sources, because they are seen as too risky," IDB Climate Change Lead Specialist Claudio Alatorre told pv magazine.
In 2015 IDB provided $1.5 billion for renewable energy projects, or 87% of its climate finance commitment, however only $212 million of this went to solar projects.
Alatorre notes that IDB has also cooperated with other European national development banks in France and Germany, and that in addition to large-scale projects it has been providing financing for distributed solar projects in several nations.
In addition to Latin America, more than $1 billion of multilateral development bank funding has gone to renewable energy projects in South Asia and another $1 billion to the Middle East and North Africa (MENA) region, giving these three the bulk of financing.
South Asia may feature even more prominently in future renewable energy finance efforts. As part of a ramp-up of annual funding for climate work, World Bank has plans to provide more than $1 billion to support solar in India.
As renewable energy funding covered a range of technologies, including even hydroelectric projects where net emissions reductions can be shown, pv magazine was unable to determine how much of overall multilateral development bank funding went to solar projects by press time.
In terms of overall mitigation finance, including both renewable energy and other forms such as energy efficiency and transportation finance, 76% of this took the form of loans. The rest was split between guarantees, policy-based loans and budget support, grants, equities, lines of credit and other instruments.
68% of mitigation finance went to public borrowers, and only 32% to private entities.